Primer: The Medicare Advantage Star Rating System

For years, policymakers and health insurers have looked for ways to simultaneously reduce federal health care expenditures and ensure better quality care for patients. For both hospital services (Part A) and physician services (Part B), the Centers for Medicare and Medicaid Services (CMS) has implemented multiple programs to track providers’ performance on various metrics and adjust payments accordingly—similar to efforts being imposed by private insurers. For Medicare Advantage (MA or Part C), CMS operates the Star Rating System. This system provides a relative quality score to Medicare Advantage Organizations (MAOs) on a 5-star scale based on their plans’ performance on selected criteria, and is now used to determine whether or not an MAO will receive bonus payments and/or rebates for their enrollees.

The Daily Dish

In 1990 Congress created the Medicaid Drug Rebate Program, a variant of price fixing that imposed a ceiling on the manufacturers’ price when provided to Medicaid patients. Specifically, manufacturers were required to offer Medicaid the ‘best price’ offered to any other health insurance provider. The price-fixing, however, had a serious catch. Before the law passed, manufacturers regularly donated prescription drugs to health care facilities with high volumes of low-income patients (in return they got a charitable deduction and some good-will). Continuing this practice, however, would mean that the Medicaid best prices was……zero.  Charitable giving collapsed.

The Daily Dish

The president will announce today executive actions to reduce the repayment obligations of student loan borrowers. According to the New York Times: "Mr. Obama’s main action will be to expand on a 2010 law that capped borrowers’ repayments at 10 percent of their monthly income. The intent is to extend such relief to an estimated five million people with older loans who are currently ineligible — those who got loans before October 2007 or stopped borrowing by October 2011. But the relief would not be available until December 2015...”

Administrative Cuts to Medicaid Will Not Solve HHS Problem

During an April 10th Senate Finance Committee hearing, Department of Health and Human Services (HHS) Secretary Kathleen Sebelius informed committee members that some states may see cuts to Medicaid funding. According to Secretary Sebelius, some states are unable to receive Medicaid applications from the federally facilitated exchange (FFE), and are left sifting through applications for individuals awaiting their Medicaid eligibility approval.

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